Cheque Guarantee Scheme

To encourage retailers to accept cheques as payment for goods and services, the first cheque guarantee card was issued by National Provincial Bank in October 1965. Initially these cards enabled encashment of cheques in branches up to a total value of £20 per day. From 1966 cards were issued that guaranteed encashments by cheque, and payments by cheque for goods and services, up to a value of £30.

The UK Domestic Cheque Guarantee Card Scheme was established in 1969 to create common, easily identifiable design features to simplify acceptance procedures for retailers and other acceptors of cheques. The Scheme’s initial guarantee limit was £30, increasing to £50 in 1977 and two additional limits of £100 and £250 were introduced in 1989. Since 1 October 1990, the common identifier on all cards with cheque guarantee functionality has been William Shakespeare, and his image is used within the cheque guarantee hologram or logo on all cheque guarantee cards.

1990 was also the year that cheque payments peaked, with 4 billion being written. However, cheque usage has been declining since then and most major retailers no longer accept cheque payments at all, so the use of guaranteed cheques is in steep decline. In September 2009 the members of the Cheque Guarantee Card Scheme announced that the Scheme will close on 30th June 2011, meaning that it will no longer be possible to guarantee a cheque under the Scheme after this date. This decision followed on from the announcement to close the Scheme made by the Payments Council earlier in 2009. The Payments Council had concluded that it was in all parties’ interests to manage the Scheme’s demise in a co-ordinated fashion following extensive consultation with guaranteed cheque users and acceptors.